The world seemed to hold its breath yesterday. People watched videos of the tsunami…of the earthquake…of the nuclear reactors. Japan’s nuclear reactors were on the verge of a meltdown.

Here at The Daily Reckoning, we predicted a meltdown in Japan – but not that kind of meltdown!

In January, seers and forecasters turned in their predictions for the year ahead. Now, we are in March, and we have already run into two major events that no one predicted.

First, the Arab world exploded. Now, the blow-ups are happening in the least-explosive part of the world, Japan.

Japanese stocks sold off yesterday. If they were a bargain when we recommended them a couple weeks ago, they are an even bigger bargain today. US stocks didn’t do much of anything.

Perhaps some kind of turning point has been reached.

Japan has been suffering from a manmade disaster for the last 20 years. It is a long, slow, painful form of national economic suicide. Now it is time to pick up the pace. This from Bloomberg:

The Bank of Japan poured a record amount of cash into the financial system and doubled the size of its asset-purchase program to shield the economy from the effects of the nation’s strongest earthquake on record.

The central bank pumped 15 trillion yen ($183 billion) into money markets to assure financial stability amid a plunge in stocks and surge in credit risk. Governor Masaaki Shirakawa and his board also increased their facility that buys assets from government bonds to exchange- traded funds to 10 trillion yen.

“We are providing as much funds as needed to dispel anxiety in financial markets,” Kazushige Kamiyama, an official in charge of the central bank’s money market operations, said before the policy announcement. “We will continue to add ample funds to stabilize financial markets.”

It used to be that central banks were charged with maintaining the integrity of the people’s money. Then, mission creep set in. Maintaining full employment was added to the job description. And then, Ben Bernanke took it upon himself to boost stock prices. Higher stock prices would encourage people to spend and invest, he thought.

And now, the Bank of Japan takes another step. It is playing a leading role in earthquake remediation – like the Red Cross or the National Guard.

The Bank of Japan is going all out. Not only is it putting emergency funds into the economy, it’s also stepping up its own QE program.

What else can it do? It was already doing all it could. The BOJ has been “zero bound” for the last 15 years – meaning, it has been lending money as cheaply as it possibly could. If monetary policy were a pair of pants it would be around Japan’s ankles. And fiscal policy? The country already has $20 of debt for every dollar of tax receipts. What’s left? Thirty dollars, surely – or bankruptcy!

The Japanese camel has a remarkably strong back. He’s held up to more than two decades of counter-cyclical stimulus programs…and central government debt that now measures 200% of GDP.

The poor long-suffering beast has seen everything. The Japanese trusted the government with their retirement money. The government spent the money. And yet, bond buyers seem none the wiser. They still lend to the Japanese government at less than 2% yield.

And now the old-timers are beginning to dis-save. That is, after saving so much for their retirements, now they are retired. And now they are drawing down their savings.

This puts the Japanese government is in a real fix. Net savings in Japan are now negative. So, who will buy the bonds Japan needs to sell in order to rebuild its economy? Who will buy the bonds Japan needs to sell in order to rebuild its infrastructure? Who will buy the bonds Japan needs to sell in order to fund its government? Who will buy the bonds Japan needs to sell in order to pay back the people who bought bonds last year…and the year before…and all the way back to 1990?

The answer is likely to be: no one.

Instead, Japan will be forced into more QE, forced to print money to make up for the money she can no longer borrow.

This will have a couple knock-on effects. First, the Japanese famously helped Europe and America finance their deficits and bailouts. Recently, Japan funded a major part of Europe’s bond sales – helping to hold down rates. Also, the last time we looked, Japan had the largest stash of US bonds in the world.

Under pressure to bring money back to the home island, you can expect Japan to be doing some selling – which might be the final straw.

Second, the Japanese are making such an obvious mess of their finances that they are bound to attract attention. Investors might notice that the Japanese aren’t the only ones. As we’ve pointed out several times, the developed economies all now count on low interest rates, huge deficits, and printing press money. Even with these massive in-puts of cash and credit grease, the economy still barely creaks forward. Without the extra grease, they will probably slip backward.

*** The ides of March are upon us already. Little blue flowers are pushing their way up through the cold earth. There are buds on lilac bushes. Cherry trees are already in bloom… Another winter seems to be history already. Where did it go?

They seem to go by so fast now…and now we’ve already put our clocks forward. Here it is, 5PM… It is bright and sunny outside.

We’re worried about the way time seems to be speeding up. As near as we can tell, we’re in good health…but we can only expect to live a decade or two more. What a pity it would be if they went by too fast.

We’re on the downhill slope now. Picking up speed as we go down. Every year that goes by will find us with less hair…less muscle…maybe even less able to think clearly and remember where we left the car keys. Next year, is nothing to look forward to in other words, not compared to this year.

The odd thing is that we tend to think about things that will happen in the future…and we’re impatient. We tell ourselves to “slow down…smell the flowers…enjoy the here and now.” But the here and now never seems as good as tomorrow.

We’re looking forward to finishing the fences…to having the orchard cleaned up…to fixing up the loft apartment in the barn. But why? What will we do next? What’s the point?

We are racing ahead…but only so that time can rush forward to meet us.